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Several public sector entities, which previously enjoyed exemption from stamp duty and income tax, among others, will now be required to pay these taxes. This, as the House of Representatives approved the Public Enterprises (Removal of Tax Concessions) Act, 2003, on Tuesday in Gordon House.
Dr. Omar Davies, Minister of Finance and Planning, in piloting the Bill, said that the Act was aimed at reducing the fiscal deficit and encourage the efficient management of, and the exercise of fiscal prudence and discipline by these entities.
The Minister said, “this Bill was actually completed with a list of prescribed enterprises in 1986 and for whatever reason, the legislative process was never completed and the public enterprises continued to enjoy the exempt status”.
Some of the entities to be affected are the Betting, Gaming and Lotteries Commission, the National Housing Development Corporation (NHDC), the Airports Authority, the HEART Trust, the Jamaica Development Bank, the Jamaica Mortgage Bank, the Jamaica Racing Commission, the National Housing Trust, the National Insurance Fund, the National Water Commission, the Petroleum Corporation of Jamaica, the Transport Authority, the Urban Development Corporation (UDC).
Minister Davies said that several pieces of legislation would also have to be amended to facilitate the Bill. These include the Airports Authority Act, the Bank of Jamaica Act, the Betting Gaming and Lotteries Act, the Jamaica Development Bank Act, the Jamaica Mortgage Bank Act, the Jamaica Racing Commission Act, the National Housing Trust Act, The National Insurance Act, the National Water Commission Act, the Petroleum Act and the Property Tax Act.
Meanwhile, other public enterprises that are not established by statutes will have the concessions removed in the same way that they were granted. They include, the Jamaica Deposit Insurance Corporation and the National Investment Bank of Jamaica.
Other revenue statutes that are to be amended to facilitate the Bill, the Minister informed, include the Income Tax Act, the General Consumption Tax (GCT) Act, the Stamp Duty Act, the Transfer Tax Act and the Education Tax Act.
The Bill also seeks to update the schedule to the GCT Act and to remove from that schedule those enterprises that are now defunct and to add other enterprises, which no longer enjoy zero-rated status.
Audley Shaw, Opposition spokesman on Finance, said that the Opposition was in support of the Bill as “this move will lead to greater fiscal prudence and tighter management of the funds that are flowing through the public sector enterprises. I think that by far the greater importance in this matter is that public enterprises be required and be called to book and be more accountable to Parliament, the Government and the people of Jamaica.”
The removal of the concessions is projected to earn the Government $600 million in revenues for the last quarter of fiscal year 2003/04.